In the aftermath of last year’s flood in Southern Alberta, insurance companies had a public relations nightmare on their hands. Residents were facing massive rebuilding costs and banks were suddenly holding mortgages for useless properties. Yet much of the damage was uninsurable because it was caused by “overland flooding,” a hazard that insurance companies in Canada have never covered. Calculations for applying existing insurance on sewer back-up damages led to erratic settlements, leaving residents of communities like High River frustrated and angry.

Speaking at the Livable Cities Forum last week in Vancouver, Barbara Turley-McIntyre, head of sustainability and citizenship for The Co-operators insurance company, painted a picture of lives ground to a halt by a disaster that some forethought might have prevented.

She believes that it’s time for collaboration on analysis and mitigation of risks associated with climate change. “We need to be able to understand what the risks are so we can do a cost-benefit analysis and as a society put our dollars where they’re going to protect your homes and communities,” she said.

That means developing up-to-date flood maps for rural and urban areas and weather hardening infrastructure and homes against coming disasters, but it also means finding ways to prevent the growing dangers associated with climate change.

Since their advent in 17th century Europe, insurance agencies have worked by taking the cost of destruction from a few and dispersing it amongst the many. They remain solvent by analyzing risks and pricing their products in a way that will cover eventualities without being so high as to scare away customers.

Although insurers have traditionally been wary of stating unequivocally that climate change arises from human activity, the industry has had a long history of observing and warning of its effects. The German reinsurance giant Munich Re, one of a few companies that provide insurance to smaller insurers, started warning of a rise in climate change related flood incidences all the way back in 1973. The company now curates the world’s most extensive database of natural disasters.

To agencies such as the Co-operators, the evidence of growing risk is irrefutable. Turley-McIntyre points out that up until 2009, the yearly cost of insurable disasters in Canada was $400 million. From 2009 to 2012, that number jumped to $1 billion. In 2013, with catastrophic flood damage in Southern Alberta and Toronto, as well as huge storms on the east coast, that number skyrocketed to $3.2 billion.

In June of 2013 more than 1500 Canadian soldiers were deployed to southern Alberta to help with flood relief. Photo: MCpl Patrick Blanchard for the Canadian Army via Flickr.

The Alberta flood caused the third most costly insured catastrophic losses in 2013. Recent disasters have already begun pushing up premiums, and without immediate action, that trend will continue.

Members of the Canadian Army set up modular tents as part of operation LENTUS, a response to the Alberta floods. Photo: MCpl Patrick Blanchard for the Canadian Army via Flickr.

In order to move forward, The Co-operators commissioned a study through the University of Waterloo to assess the viability of providing overland flood insurance, a product that has never been available in this country despite flooding being the “most frequent type of natural hazard in Canada.”

Researchers Jason Thistlethwaite and Blair Feltmate found that all Canadian insurance agencies were harbouring the same fears about climate change. “Without effective mitigation, flood risk was predicted to increase with climate change, which will add burden on taxpayers and potentially lead to reputational and regulatory risk for insurers,” they wrote. “This increase in flooding could reduce the availability of existing property insurance coverage in some areas.”

Unchecked increases in flooding will lead to increased vulnerability, which will in turn transfer more of the financial burden of clean-up to the government. Turley-McIntyre doesn’t believe that it’s enough to predict these coming disasters; we must also plan ahead to mitigate their effects by building communities that are resilient to climate change.

Mark Way, senior vice president of sustainability in the Americas for European reinsurance agency Swiss Re, agrees. “Higher levels of resilience means lower levels of loss,” he said, speaking at the same event as Turley-McIntyre. “Climate change is best tackled with a portfolio of adaptation measures.”

But insurance agencies can’t do it alone. The most recent report from the Intergovernmental Panel on Climate Change (IPCC) warns, “Risk financing mechanisms in the public and private sector, such as insurance and risk pools, can contribute to increasing resilience, but without attention to major design challenges, they can also provide disincentives, cause market failure, and decrease equity. Governments often play key roles as regulators, providers, or insurers of last resort.”

Turley-McIntyre hopes that the floods in Alberta may have been a catalyst for the necessary cooperation between the provincial, municipal and federal government, because it happened in the Prime Minister’s “back yard” and because “it caused the government to come close to not meeting its budget targets for last year.”

Flooded city streets in Calgary, Alberta. Photo: Wayne Stadler via Flickr.

Ian Bruce from the David Suzuki Foundation has seen positive work from municipal and provincial governments, but sees efforts sorely lacking at the federal level. He believes that changes within the insurance industry will make it ever harder for the federal government to ignore the pressing issue of climate change.

In order to prevent worsening disasters, governments must prioritize clean energy, invest in green infrastructure and modernize and expand public transportation systems to get more cars off the road.           

“I can see a trickle-down effect happening where the changes within the insurance sector changes investor and banking decisions, which then influences government policy,” he says. “Certainly without the immediate support from the federal government this transition will be more chaotic and a bit slower, but I see it happening. It’s only a matter of time.”

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As the people of southern Alberta begin to put their lives back together, the question has become whether this historic disaster could be the result of climate change. The answer from scientists has been a resounding maybe.

Yes, record high temperatures in the north caused the weather pattern that brought about unprecedented rainfall at the foot of the Rocky Mountains. But no single weather pattern, no matter how rare, can be attributed to climate change. 

However, in the case of Calgary itself, there is another lesson to be learned—it’s time to start listening to scientists.

Andrew Nikiforuk points out that experts from the insurance industry to budget-starved government organizations have been warning of a massive flood in the Bow River and Elbow River for years. He calls this Calgary’s “Manhattan moment.”

But Canada Research Counsel Chair in Natural Hazard Research John Clague says the problem goes back much further, and it’s a story that feels eerily familiar to those who are interested in the debate over climate change.

Evidence of the likelihood of this kind of disastrous flooding has existed for more than 30 years. In 1979, the municipal government of Calgary commissioned Montreal Engineering Company (Monenco) to do a study of the flooding hazards at the confluence of the Bow and Elbow Rivers. The results were prescient.

Although Clague says that this flood is most likely worse than anything in recorded history, there were three major floods between 1875 and 1902, then again in 1932, followed by decades of relative dryness. The study predicted a major flooding event every 70 years or so.

With this in mind, Monenco presented Calgary with a number of strategies for limiting the predicted millions of dollars worth of damage (thanks to development since then, the number is more likely to be in the billions).

“At the heart of the recommendations was a floodplain management scheme in which hazardous areas would be officially delineated. New development would be prevented or discouraged in the hazardous areas, and existing structures would be required to meet certain ‘floodproofing’ standards,” University of Calgary’s G D Osborn wrote in Geologic And Hydrologic Hazards In Calgary.

The standards went into public consultation, inciting ire on the part of residents. Those who stood against the plans saw them as an economic impediment. They argued that there were holes in the science, and that because they’d never personally experienced such a disaster, it seemed unlikely.

“This report was made public and there was a huge amount of resistance to it,” Clague says. “People thought that this was intruding on their freedom. Those flood-prone surfaces were developed and now we see the consequences of that.”

What this comes down to is a problem that has become familiar in the debate over climate change: political obstinacy ending in disaster. The extraordinary damage wrought in the last week is the end of a Rube-Goldberg machine set rolling in the early 1980s.

There’s no reason to fault the current administration. The Monenco report was buried long before Naheed Nenshi came to power, its warnings consigned to a few paragraphs in a university textbook.

“But it does show you how politics can get in the way of proper planning,” says Clague.

This kind of blindness a global problem. It’s the same problem that has caused the deaths of almost 1000 in Uttarakhand in India. In December 2012, the Ministry of Forests Environment and Forests there declared the “entire watershed around the 135-km stretch between Gaumukh and Uttarakashi, along the Bhagirathi River, as an eco-sensitive zone under the Environment Protection Act, 1986.”

The declaration should have banned all construction in the area, but the government there felt this would be an impediment to economic growth.

In 2009 I came across a graveyard in the town of Soma on the east coast of Japan, Fukushima prefecture, that was dedicated to the victims of a 1960 tsunami, caused by a massive earthquake in Chile. Concrete barriers shaped like giant jacks blocked the surf from the shore. Their weight had gifted those who lived around them a sense of freedom. That long ago disaster was all but forgotten. Not far away, they had built a nuclear reactor.

The only way to move forward now is to learn. Calgary should be the last piece of evidence Canada requires to begin paying attention to the future. Thinking ahead of the disasters.

This lesson will only become more potent as the dire predictions of climate scientists come to fruition in the next few decades. As global temperatures rise, there will be more evaporation from the warming ocean, and the warmer atmosphere will be able to hold more water. This could lead to more rain. Alberta has historically been vulnerable to extreme weather and as the decades pass, it will likely grow worse, unless we act.

Here we can find a positive roll model in Japan. Since the 1920s that country has poured massive amounts of money into earthquake safe building techniques. Rather than waiting for a new disaster to rebuild, they sought innovative new ways to work around the problem. Imagine what might have happened in 2011 if most of the high-rises in Tokyo hadn’t been built to sway with the shaking of the earth during an earthquake. The death toll might have struck closer to the millions.

The lesson here is not just for Calgary. There are other cities in Canada that are exposed to the whims of our changing climate. Last year’s record landslide in Hope, BC that killed four people was a terrible sign of what is to come.

Cities that build near water are particularly vulnerable. “It's true in Kamloops and arguably in Vancouver,” says Clague, who teaches at Simon Fraser University. “We've allowed a huge amount of development on the Fraser River flood plain.”

Alberta Premier Alison Redford estimates ten years for recovery in southern Alberta. She has already pledged $1 billion from the provinces cash-strapped budget.

With that money, there is an opportunity to do it better this time around, given the right amount of structural support. Clague says the solutions will be expensive, but the benefits far outweigh the costs.

We’ve all made some “bad decisions,” says Clague. “That's kind of the way it is. We learn from our mistakes.”

Image Credit: Wayne Stadler via Flickr

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